Economic Operation Analysis Of Filament Weaving Industry In The First Half Of 2021

In the first half of 2021, facing the complicated development environment at home and abroad, the production situation of China's filament weaving industry continued to improve, the enterprise efficiency improved steadily, and the industry as a whole showed the development trend of accelerating recovery. However, under the influence of factors such as rising international commodity prices, continuous evolution of global epidemic situation and local rebound of domestic epidemic situation, the uncertainty of external environment has increased, and the smooth operation of the whole year is still facing many tests.

　　 1、 Industry benefits are picking up

According to the statistics of the National Bureau of statistics, in the first half of the year, the business income of China's textile industry above designated size increased by 20.32% year-on-year, and the growth rate increased by 36.72% compared with the same period of last year. Based on the first half of 2019 as the base period (the same below), the average growth rate in two years is 0.29%; The total profit increased by 41.05% year-on-year, 60.06 percentage points higher than the same period of last year, with an average growth of 6.88% in two years. In the first half of the year, the profit margin of operating income of textile enterprises above designated size was 4.6%, which was 0.68 and 0.49 percentage points higher than that in the same period of last year and the first quarter of this year, respectively.

In the first half of the year, China's chemical fiber weaving and printing and dyeing finishing industry revenue increased by 25.57% year-on-year, with an average growth of 2.59% in two years; The total profit increased by 66.25% year-on-year, with an average decrease of 7.73% in two years; The profit margin was 2.73%, 0.67 and 0.91 percentage points higher than the same period of last year and the first quarter of this year respectively. In terms of industry segmentation, the business income of chemical fiber weaving industry (above designated) increased by 24.04% year-on-year, with an average growth of 2.17% in two years; The total profit increased by 44.24% year on year, with an average decrease of 7.63% in two years; The profit margin was 2.48%, 0.35 and 0.5 percentage points higher than the same period of last year and the first quarter of this year respectively. The business income of chemical fiber dyeing and finishing industry (above designated) increased by 32.09% year-on-year, with an average growth of 4.25% in two years; The total profit increased by 181.97% over the same period of last year, with an average decrease of 9.55% in two years; The profit margin was 3.7%, 1.96 and 2.55 percentage points higher than the same period of last year and the first quarter of this year respectively.

In the first half of this year, the operating income of China's chemical fiber weaving industry above designated size was basically the same as that in 2019, but the total profit decreased by 7.63% on average in two years. This is because the loss area expanded from 12.88% to 19.54%, and the loss amount of loss making enterprises increased significantly by 95.52%. At the same time, the enterprise's three expenses increased by 6.3%, accounts receivable increased by 7.62%, and finished goods inventory increased by 19.5%. The enterprise's credit sales ratio was too high, the inventory was high, and there were financial risks and insufficient profitability.

The above data show that the quality and efficiency of filament weaving industry in the first half of the year has improved significantly compared with that during the epidemic period, and the main economic indicators are recovering continuously. However, due to the fluctuation of RMB exchange rate caused by the epidemic situation and the international situation, the soaring sea freight and other factors, as well as the rising costs of raw materials and labor, the profit space is obviously squeezed, Profitability has not returned to the level before the epidemic, enterprises are facing more challenges, and there is still some pressure for the smooth operation of the industry.

Table 1 ? Summary of main economic indicators of China's chemical fiber weaving and dyeing and finishing industry from January to June 2021

Note: the two-year average growth rate is the geometric average calculated based on the first half of 2019 (the same below).

Source: National Bureau of statistics

?

　　 2、 The production situation continued to recover

According to the statistics of each cluster area, in the first half of 2021, the cumulative output of chemical fiber filament fabric in Shengze, Xiuzhou, Longhu, Siyang, Pingwang, Keqiao, Dafeng and Xiaohai was 11.208 billion meters, with a year-on-year increase of 6.1%. The production situation continued to recover, but affected by the epidemic situation and industrial transfer, it still did not return to the same period in 2019, and the average output decreased by 4.09% in two years.

Longhu and Siyang areas showed a bright performance, and filament fabrics achieved an average positive growth of two years. On the one hand, the output growth of Siyang area is due to the fact that as the transfer and undertaking place of filament weaving industry, Siyang new factories have been put into operation in recent years, and the production capacity has been gradually expanded; On the other hand, Siyang production products are mainly home textile fabrics, less affected by the epidemic. The Longhu area is mainly composed of outdoor sports and cold proof clothing fabrics. Affected by the season and the rise of "fitness fever", the output has increased significantly.

Table 2 ? Output table of chemical filament fabrics of main filament weaving industry clusters in China from January to June 2021

Data source: Industrial Clusters

?

　 Third, the price of raw materials rose strongly

Figure 1 shows the price trend of chemical fiber filament, cotton, PTA futures and Brent crude oil in China. Since 2021, under the background of demand recovery, inflation expectation and OPEC production reduction, the commodity market has continued to strengthen, and the price of Brent crude oil has been rising all the way, which has exceeded the oil price level before the outbreak of the new crown epidemic. With the increase of crude oil price, PTA price also continued to rise, driving the price fluctuation of chemical fiber filament. The prices of main chemical fiber filaments showed significant differences in the first and second quarters. In the first quarter, under the influence of various factors, such as the rise of crude oil, the release of liquidity and the increase of speculative demand, the market rose significantly, reaching the highest point in the first half of the year at the end of February or early March; The second quarter continued to fall, prices fell. At the same time, cotton prices rose all the way to a new high. Under the double pressure, the unit price of main chemical fiber filament appeared "tail up" market in July.

Figure 1 ? Price trend chart of China's chemical fiber filament, cotton and Brent crude oil from January 2020 to July 2021

Unit: USD / barrel, yuan / ton

Data source: China silk capital website

Due to the sharp rise in raw material prices at the beginning of the year, the cost of orders received by some filament weaving enterprises was high and could not be produced normally. Some orders could only be postponed or cancelled, and the profit margin was further compressed. Although the raw material prices fell in the second quarter, they were still higher than the level of the same period last year, and the pressure on the industry operation increased. Crude oil market rose and fell in August. It is expected that PTA will continue to fluctuate strongly in the short term, and filament weaving enterprises will still face higher cost pressure.

?

　　 4、 Stable performance of foreign trade market

　　 （1） Export volume increases and prices fall

According to the data of China Customs, in the first half of 2021, China's textile and clothing exports amounted to 140.86 billion US dollars, a year-on-year increase of 12.06% and an average increase of 6.2% in two years.

In the first half of 2021, China's total exports of chemical fiber filament fabrics reached 7.791 billion US dollars, a year-on-year increase of 48.77%, and an average increase of 2.53% in two years. In terms of export volume, China's chemical fiber filament exports totaled 9.076 billion meters in the first half of the year, with a year-on-year increase of 50.14% and an average growth of 5.03% in two years. With the increase of global coverage rate of new coronapneumonia vaccine, the increase of foreign market activity, and the backflow of some orders, the export market of China's filament fabric has obviously recovered, achieving a significant growth in 2020 with a low base, and exceeding the level of the same period in 2019. The cumulative export of China's filament fabrics from January to June 2021 is shown in Table 3.

Table 3 ? Cumulative export of China's filament fabrics from January to June 2021

Source: China Customs

In terms of product classification, in the first half of the year, China exported 250 million meters of nylon filament fabrics, an increase of 15.77% over the same period of last year, and an average decrease of 14.68% in two years. The total export of polyester filament fabric was 7.825 billion meters, with a year-on-year increase of 52.26% and an average increase of 5.38% in two years.

Figure 2 shows the monthly export volume and year-on-year situation of China's chemical fiber filament fabrics since January 2020. It can be seen from the figure that after the outbreak of the epidemic in 2020, the export of filament fabrics suffered a great impact, with the deepest decline in May, and then rebounded, and it has achieved continuous positive growth since September. At the beginning of 2021, the export volume increased significantly on the basis of last year's low base. In March, due to the rise of raw material prices and the increase of shipping costs, some overseas orders could only be postponed or cancelled, resulting in the decline of export volume in the current month. In the second quarter, with the fall of raw material prices and the increase of overseas demand, the export volume further increased and gradually returned to the pre epidemic level.

Figure 2 ? Monthly export of China's filament fabrics from January 2020 to June 2021

Source: China Customs

From the perspective of export price, according to the statistics of China's customs, the average export price of China's chemical fiber filament fabric was 0.86 USD / m in the first half of the year, down 0.91% year-on-year. In the first half of this year, the price of raw materials rose sharply. Under this pressure, the export price of filament fabrics declined instead of increasing. It can be seen that the stability of foreign trade is mainly maintained in the market scale, but the overall profitability is not very ideal.

　　 （2） Import volume and price rise

According to the statistics of China's customs, in the first half of this year, China imported 233 million meters of filament fabrics, a year-on-year increase of 3.87%, and an average decrease of 22.5% in two years. Among them, the total import of nylon fabric was 93 million meters, with a year-on-year increase of 11.20%, and an average decrease of 24.03% in two years; The total import of polyester fabric was 85 million meters, with a year-on-year increase of 2.91% and an average decrease of 22.79% in two years.

In the first half of the year, the import price of China's chemical fiber filament fabric increased further, with a year-on-year increase of 7.8%. Among them, the import unit price of nylon filament fabric increased by 7.21% year-on-year, reaching 1.63 USD / m; The import unit price of polyester filament fabric increased by 2.50% to 2.56 USD / m.

Compared with 2020, the import volume and price of China's chemical fiber filament fabric increased simultaneously, but compared with the same period in 2019, the import volume decreased significantly, and the unit price of imported fabric increased significantly. The reasons may be as follows: first, the epidemic situation in foreign countries is still in a high incidence situation, the rebound of epidemic situation affects the resumption of work and production, and the output decreases; Second, the price of crude oil is rising, which leads to the rise of cost; Third, China's imports of filament fabrics are mainly high-end fabrics, and the independent research and development of middle-grade products has achieved considerable results, and the import dependence has gradually weakened.

Table 4 ? Cumulative import of main filament fabrics in China from January to June 2021

Source: China Customs

?

　　 5、 Domestic sales potential gradually released

Since 2021, China's national economy has been steadily improving, which has led to the continuous release of consumption potential, and the domestic textile and garment market has gradually recovered. According to the data of the National Bureau of statistics, in the first half of 2021, the total retail sales of consumer goods reached 21190.4 billion yuan, an increase of 23.0% year on year. Among them, the sales of clothing, shoes, hats, needles and textiles above the national quota increased by 33.7% year-on-year, with an average growth of 3.7% in two years. In the first half of the year, the retail sales of online wearing goods increased by 24.1% year-on-year, 27% higher than the same period of last year, with an average growth of 9.8% in two years. The above data show that the impact of the new epidemic on China's social consumption level has gradually weakened, and people's consumption confidence has gradually increased.

From the trading volume of China Textile City, affected by the season, the spring and summer mass fabrics mainly made of imitation silk products were popular in March, and the production and sales were smooth. In April, due to the excessive increase of raw material prices and the time, the shipment was weak. In May, the turnover gradually increased, the thin fabric market recovered, and in June it entered the off-season again; The lining market has a strong wait-and-see mentality. The confidence and demand of polyester filament clothing lining and bag lining materials are insufficient, and the sales are weak; The demand for autumn and winter clothing fabrics mainly composed of jacquard and elastic products is gradually increasing. The characteristics of "multi variety and small batch" are obvious. The shipment of mass products is flat and the market of characteristic fabrics is better; Home textile products, curtain cloth transaction varieties, relatively large volume, 280cm polyester filament jacquard volume steadily pushed up. From the trade situation of main filament fabrics in China, the competition pressure of mass products and conventional products is greater, the demand for bright spot products is relatively prosperous, the market prospect of decorative cloth is good, and the market demand of curtain cloth is relatively optimistic in the second half of the year.

?

　　 6、 Trend forecast in the second half of the year

Generally speaking, China's filament weaving industry will accelerate the recovery in 2021, but the foundation of stable development needs to be further consolidated, which is unstable and uncertain. There are still some risks in realizing the stable and healthy development of the whole year.

From the perspective of domestic demand market, in the first half of the year, the national economy continued to recover steadily, strengthened and improved steadily, and the circulation of employment, income and consumption continued to be optimized and balanced. However, at present, the domestic epidemic has rebounded in many places, increasing the uncertainty of market recovery. However, in the long run, the trend of consumption continuing to repair remains unchanged. In addition, the consumption stimulus of shopping festivals such as "double 11" and "double 12" in the second half of the year may further release domestic demand potential.

From the perspective of export market, the global epidemic situation continues to evolve, and the impact on the international market has not yet fully recovered. Disturbed by the new geopolitical situation such as the politicization of "virus traceability" and the industrial chain alliance, the factors of post epidemic instability have increased. Under the repeated epidemic situation, sea freight skyrocketed, and one container was difficult to obtain, which led to a substantial increase in transportation costs of enterprises and an increase in the probability of default. As of the end of July, the phenomenon of freight increase and port congestion has not been fully alleviated, which has become the biggest uncertain factor affecting exports in the second half of the year. Therefore, although the export of filament fabrics in the first half of the year has obviously recovered, the situation of foreign trade in the whole year is still uncertain. Excluding the influence of accidents, it is preliminarily expected that the export of filament fabrics will achieve a small growth in the whole year.

In addition, the rising prices of raw materials in the upstream caused by global inflation did not transmit to the sales prices of downstream products, which increased the production and operation pressure of enterprises in the filament weaving industry. Although the oil price in July has been obviously fluctuated, and the subsequent upward pressure has increased, it is expected that there will still be support for the cost side of chemical fiber, and the filament weaving enterprises may still bear the pressure from the cost side in the second half of the year.

To sum up, due to the complexity of the external environment, increased uncertainty, and affected by the low base in 2020, the growth rate of major economic indicators in the second half of 2021 will gradually slow down, and it is expected that the growth rate of the main economic indicators will be higher in the first half of 2021 and stable in the latter half of the year. In the second half of the year, China's filament weaving enterprises should focus on the recovery of terminal demand, the price fluctuation of crude oil and main chemical fiber filaments, the introduction of national policies, the change of RMB exchange rate, etc., and strive to tap the potential of domestic and foreign markets, reasonably arrange production, control inventory, and prevent the risk of capital fracture. It is suggested that enterprises should carry out technical transformation or product research and development in the off-season production, pay attention to "differentiated" competition, make characteristic products, realize "people have no I have, people have my own advantages", and strive to grasp the market initiative.

(source: China filament weaving Association)